Edvest College Savings Plan

Plan Details & Information

If you’re looking to take a deeper dive into the Edvest College Savings Plan, this section includes just about everything from how the plan works to what you can do with it.

Thank you for considering the Edvest College Savings Plan.

It’s never too early to prepare your child or grandchild for a successful future. No matter what their age — with the rising cost of tuition — the time to start is now.

The Edvest College Savings Plan is a state-sponsored, tax-advantaged 529 college savings plan that’s helping families and individuals plan for the cost of higher education. It’s available to any citizen or tax payer. And just about anyone can help contribute including Grandparents, other family members and friends.

It only takes about 15 minutes to open an account online and it is easy to manage. There are a variety of low-cost investment portfolios to choose from including age-based, multi-fund, single-fund and stable principal options.

A 529 college savings plan can help you save more of your money over time. Any earnings grow free from federal tax, and many states like Wisconsin offer a state income tax deduction for contributions. Limitations apply. See the Disclosure Booklet for details. Withdrawals are tax-free at both the federal and state level when used for qualified higher education expenses. As a 529 Plan, Edvest also offers certain gift and estate tax planning benefits; consult your tax advisor.

You can use the funds for a lot more than just tuition — including required fees, certain room and board costs, books, supplies, as well as computers and related technology costs such as Internet access fees and printers. Additional equipment required for attendance may also qualify. Funds can be used at most accredited colleges and universities in the United States — even certain colleges abroad.

If you’re worried about having the account in one state and attending school in another, don’t be. With most plans, your school choice is not affected by the state of your savings plan. You can be a resident of Wisconsin and send your student to college in North Carolina.

This section provides a summary of information about Edvest, but it’s important you read the full Disclosure Booklet for more detailed information.

About the Plan

Edvest was created by the State of Wisconsin as a tax-advantaged way to help people save for the cost of higher education.

To contact the plan:

CALL
EMAIL
MAIL
1-888-338-3789

Monday - Friday
7:00AM to 7:00PM CT
Edvest College Savings Plan
PO Box 55189
Boston, MA 02205-5189
CALL
1-888-338-3789
EMAIL
MAIL
Edvest College Savings Plan
30 Dan Road
Canton, MA 02021-2809

Plan Management

Edvest is administrated by the State of Wisconsin, acting by and through the Edvest College Savings Plan Board.

The Direct Plan Manager is TIAA-CREF Tuition Financing Incorporated, or TFI. TFI is a wholly owned subsidiary of Teachers Insurance and Annuity Association of America (“TIAA”). TIAA, together with its companion organization, the College Retirement Equities Fund (“CREF”), forms one of America’s leading financial services organizations and one of the world’s largest pension systems, based on assets under management.

A financial services company with nearly 100 years’ experience, TIAA specializes in helping clients like you reach your financial goals — for retirement, saving for college, or providing protection for your loved ones. It’s how we meet our commitment to helping you make financial well-being possible.

TFI and the Edvest College Savings Plan Board entered into an agreement under which TFI provides certain services, including investment recommendations, recordkeeping, reporting and marketing.

Account Ownership & Beneficiary Eligibility

If you’re a U.S. citizen or resident alien with a valid Social Security Number or Taxpayer ID Number, and you’re least 18 years of age, you’re eligible to open an account. Individuals opening an account may also designate a person to be the Successor Account Owner in the event of their death.

Additionally, certain types of entities with a valid Taxpayer ID Number such as a trust, an estate, or a corporation may also open an account*.

*Additional restrictions may apply, please refer to the Disclosure Booklet for details

The beneficiary is the future student. The beneficiary can be anyone with a valid Social Security Number or Taxpayer ID Number. Typically this would be your child, your grandchild, or yourself. You do not need to be related to the beneficiary, but there may only be one beneficiary per account. The only exceptions to this are entities establishing this as a general scholarship account.

Contributions

Minimum Contributions & Maximum Account Balance

You can open an account with as little as $25 dollars per investment option, or $15 dollars per pay period through payroll deduction.

Your maximum account balance per beneficiary for Edvest is $456,000. Any contribution beyond this amount would be returned to you. In the event your account reaches this amount, it may continue to accrue earnings/interest, though further contributions would be returned and not applied.

How to Make Contributions

One of the best aspects of Edvest is that it’s easy to make contributions. There are many ways to add to the fund including:

  • A one-time electronic funds transfer
  • Recurring automatic fund transfer from a checking or savings account
  • Automatic payroll deduction
  • Rollover from another state’s 529 plan*
  • Proceeds from a Coverdell Education Savings Account*
  • Personal check, bank draft, cashier or teller’s check mailed to:
Standard Delivery Overnight Delivery Only
Edvest College Savings Plan
PO Box 55189
Boston, MA 02205-5189
Edvest College Savings Plan
30 Dan Road
Canton, MA 02021-2809
The Edvest College Savings Plan cannot accept cash contributions, starter checks, traveler’s checks, credit cards, convenience checks and some other forms of payment.
STANDARD DELIVERY

Edvest College Savings Plan
PO Box 55189
Boston, MA 02205-5189

OVERNIGHT DELIVERY ONLY

Edvest College Savings Plan
30 Dan Road
Canton, MA 02021-2809

The Edvest College Savings Plan cannot accept cash contributions, starter checks, traveler’s checks, credit cards, convenience checks and some other forms of payment.

Systematic Exchange Option

Systematic Exchange is an optional feature offered by Edvest, and allows you to regularly transfer funds from one or more investment options to one or more different investment options. You may choose this option when making a one-time new contribution, or with funds already invested in your account. Similar to the Automatic Contribution Plan, you make recurring contributions to an investment option over time, but instead of making regular transfers from a bank account, Systematic Exchange allows you to make transfers from an Edvest investment option (e.g., from Principal Plus Interest Option to Age Based Option, vice versa, or any other combination of “Source Investment Option” and “Recipient Investment Option”). You choose the amount you would like to transfer either on a monthly, quarterly, semi-annual or annual basis. If you elect the Systematic Exchange option at the time your Edvest account is opened, it will be considered the initial investment allocation for your account. If you elect, change or terminate the Systematic Exchange option for your existing Edvest account, it will be considered a change in investment strategy for previously contributed funds which you are allowed to change twice per calendar year.



*Be sure to consult with a qualified advisor regarding the possible legal and tax consequences associated with such changes.

Withdrawals

Only the account owner may make a withdrawal. You can request a withdrawal by mail, by phone, or from the plan’s website. Withdrawals may be made individually. You can pay the institution, send it directly to the beneficiary or a third party*, or reimburse yourself. Be sure to keep all receipts to substantiate qualification.

*Payments to a third party available only by completing and submitting a Withdrawal Request Form.

Type of Withdrawals:

  • Qualified Withdrawals
    These are untaxed and include any withdrawals that will be used to cover Qualified Higher Education Expenses for the student at an Eligible Educational Institution. The student must be enrolled for at least half-time for room and board expenses.
  • Taxable Withdrawals
    The earnings portion of this type of withdrawal is taxed but don’t include any additional penalty. Say your child receives a full scholarship or attends a military academy. You could still use the money for school but earnings would be taxed. If your child receives a partial scholarship, a portion of your withdrawal equal to the amount of the scholarship would be taxed. The final example would be if the beneficiary dies or has a disability. None of these examples would be subject to a penalty.
  • Non-Qualified Withdrawals
    The earnings portion of this type of withdrawal can be taxed normally and also subject to a 10% additional federal penalty. Examples might include using the money for a car, vacation or home improvement. But even if you urgently need to pay a medical bill and withdraw money from your 529 plan as a last resort — it would still be taxed and penalized and may be subject to Wisconsin state income tax (see State Income Tax Information under Tax Advantages).

In the event of a refund of amounts paid for qualified higher education expenses from an eligible educational institution, the refund may be redeposited to the 529 plan within 60 days without penalty. The recontributed amount cannot exceed the amount of the refund.

Qualifying Expenses & Institutions

Qualified Higher Education Expenses may include tuition, certain room and board expenses in addition to any fees, books, supplies and equipment required for enrollment and attendance at an Eligible Education Institution. Computers and related technology such as internet access fees, software or printers are also qualified education expenses. The student must be the primary user of the equipment.

If the beneficiary is a special needs student, any additional costs required for enrollment or attendance to meet those needs will also be covered.

About Room and Board Expenses

Room & board costs are considered qualified only during the academic period in which the student is enrolled or accepted for enrollment in a program that leads to a recognized educational credential. This amount cannot exceed the institution’s ‘cost of attendance’ allowance.

Funds can be used at most accredited colleges, universities, technical colleges, professional schools, and graduate schools in the United States — even certain colleges abroad.

See the Disclosure Booklet (PDF) for more information.

Visit Ed.gov to find out if your school is accredited.

Investment Options

Edvest provides a variety of professionally managed investment options to choose from including age-based options that automatically change as the beneficiary ages. Alternatively you can tailor your investment options with multi-fund, single-fund and stable principal options to match your risk tolerance, timeline, and investment preferences.

Tax Advantages

When you pay fewer taxes, you can earn more and grow your account faster — giving your child or grandchild an even bigger head start.

See the difference these tax advantages can make over time in the table below.

Benefits of Tax-Free Growth: Taxable = $46,788, Tax-Free = $54,958 over 18 years

This example assumes an initial investment of $5,000, monthly contributions of $100, and a 6% annual rate of return over 18 years. The taxable account assumes a 28% federal and 5% state tax rate. The illustration is for illustrative purposes only and does not represent the performance of any specific portfolio.

Federal Income Tax Benefits

529 plans like Edvest offer unsurpassed income tax benefits. Although contributions are not deductible on your federal tax return, any investment earnings can grow tax-deferred, and distributions to pay for the beneficiary’s college costs come out federally tax-free.

State Income Tax Information

In addition to federal tax benefits, there are state tax benefits as well. For Edvest, tax treatment is as follows:

Contributions reduce Wisconsin taxable income up to a maximum of $3,140 per year, per beneficiary for each tax year ($1,570 for divorced parents of a beneficiary). Contributions greater than the maximum reduction amount may be carried forward to reduce your future state taxable income. Plus, contributions may be made for the current tax year up until April 15th of the following year. This applies to everyone — parents, grandparents, aunt, uncles and friends — not just the account owner. Also, the principal portion of an incoming rollover from another qualified tuition program qualifies as a contribution eligible to reduce Wisconsin taxable income.

Any withdrawals taken within 365 days after a contribution must be added to Wisconsin taxable income if the contribution was previously subtracted from income, and the account balance was less than the withdrawal amount prior to the contribution.

Qualified Withdrawals are not subject to Wisconsin income tax. Non-Qualified Withdrawals of contributions made after 2013 and an outgoing rollover to another state’s 529 plan are subject to Wisconsin income tax to the extent the amount was previously claimed as a reduction from Wisconsin taxable income. Wisconsin tax benefits related to Edvest are available only to Wisconsin tax payers. You should talk to a qualified advisor about how Wisconsin tax provisions affect your circumstances.

Estate Tax Planning Benefits

There’s another tax advantage unique to the 529 plan. There’s no federal gift tax on contributions up to $14,000 per year for single filers and $28,000 for married filers. There’s even an option to gift amounts up to $70,000 for single filers and up to $140,000 for married filers if pro-rated over 5 years. This means you could make a one-time gift equivalent to the 5 year amount and it could all qualify for the federal gift tax exclusion. Consult your tax advisor.

Reviewing & Changing Your Investments

It’s a good idea to periodically re-evaluate your investment strategy as your goals, investment horizon, and personal situation change — for example annually at tax time, on a yearly basis if your income changes, or upon the birth of another child.

Fees & Expenses

There are no application fees, no cancellation fees, no change in beneficiary fees — only program management and underlying mutual fund fees.

Risks of Investing in the Plan

As with any investment, there are risks. To help you manage these risks there are flexible investment options ranging from conservative to aggressive. Assets in an account are not guaranteed or insured. The value of your account may decrease and you could lose money, including amounts contributed.

For more information about the risks involved in investing in a particular investment option, and whether or not an option is appropriate for you, read the Disclosure Booklet (PDF).

Making Changes to Your Account

It’s possible you might want or need to make changes to your account. Here's a quick summary of the types of changes you can make and what happens when you do:

Changing the Beneficiary

After you open an account you can change the beneficiary of the account to an eligible family member of the former beneficiary without adverse federal tax consequence. “Family member” includes not just immediate family but grandparents, aunts and uncles, step children, in laws...even first cousins. Otherwise, changes may be subject to federal income tax as well as other state and federal tax consequences. See the Disclosure Booklet (PDF) for more information.


Changing Investment Strategy

Anytime you make a new contribution, you may select a different investment for that amount. However, you may only change the previously contributed amount twice per year or when you change a beneficiary, and only then if it’s a member of the previous beneficiary’s family. If you have more than one account for the same beneficiary, this restriction applies to all accounts, so you’ll need to make all changes on the same calendar day. You make these changes by submitting the proper asset allocation instructions.


Adding or Changing a Successor Account Owner

You can add or change a successor account owner at any time by completing the appropriate form.*


Transferring Account Ownership

You may also transfer the ownership of your account to another individual or entity that is eligible to be an account owner. This is not the same as changing a successor account owner. This would be when you want to irrevocably sign away all rights, title and interest in the account.*


*Be sure to consult with a qualified advisor regarding the possible legal and tax consequences associated with such changes.